Shravan Venkataraman 🎑 Profile picture
Coder, Entrepreneur, Trader. Helping you avoid the pitfalls of being a first time trader/investor/entrepreneur
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28 Oct
PVR weekly chart.

Looks like unseen volumes have come into PVR post april.

Usually such volumes are associated with institutions. Image
If you look at the big drop in march, the volumes aren't that high. Marginally higher than usual/average, but not significantly high enough to consider institutional selling.

But look at the circled region after april. That looks like institutional activity. Image
Two possibilities:

1. Institutions are betting on PVR as a contrarian bet and accumulating it.

2. Institutions are realising that PVR is junk and selling it to naive retail buyers.

Let's see what's happening.
Read 16 tweets
28 Oct
2 ways to earn money online:

1. Share your experience and help people save time:

Cutting learning curve, learning about potential mistakes, pointing towards the better sources of information to learn things from, preventing people from spending on useless workshops, etc.
2. Share your experience and help people save money:

Sharing cost effective ways to achieve x, cutting cost where possible without cutting quality, achieving x goal in less than average expected cost, preventing monetary losses due to avoidable mistakes, etc.
This sharing can be in the form of:

- E-Books
- Independent Courses
- 1-1 mentorship
- 1-many mentorship
- Video lectures
- Paid Slack/Discord channel membership
- Teachable/Skillshare/Udemy courses.
Read 4 tweets
27 Oct
Interpretation of Financial Statements - preliminary filters.

1. Looking for sustainable competitive advantage:

When looking for sustainable moat, you wanna see consistency - in earnings, in having low debt, in having growing earnings, low spending in capital expenditures, etc.
The longer the company has existed, and if it sells you the same product for years (like Coca Cola), it reduces production costs and other costs (R&D, Training, marketing) slowly as the company ages.

When costs are reduced, margins and profits increase.
2. What to look for in an income statement:

Let's take a look at Apple:

i) You want to see earnings grow at a steady pace. Take a look at the net income below. Image
Read 25 tweets
27 Oct
How to calculate average points per trade of a system:

Assume only 5 trades (for illustration purposes) in the system:

Trade 1: +300 points
Trade 2: -180 points
Trade 3: +70 points
Trade 4: -130 points
Trade 5: +100 points
- Total points made: (300-180+70-130+100) = 160 points
- Average points per trade: 160/5 = 32 points.

So, when I say in the example (in the thread linked above) that the system makes on average 200 trades a year, and 29-30 points per trade in BNF, what do I mean?

Average points made per trade in BNF over the 200 trades.

That's what I mean.
Read 6 tweets
27 Oct
If you really want to learn from someone on social media, you don't have to pay for their courses or any special access programs.

Like Ekalavya, you can consume with intent whatever your self-assumed Guru puts out in the form of content.
When you use a bit of common sense, reverse engineering, and connecting the dots as a practice with all that they post, you can figure out with 95-98% what they do, how they do it, why they do it, etc.
When I initially started moving towards systematic trading, I read all of @madan_kumar's tweet threads, blog posts, zerodha qna interview and its comments section, his threads on traderji forum, etc. Those have the best insights most of which he likely condenses in his workshops.
Read 10 tweets
26 Oct
Independent theaters are going to survive Covid better than the franchises like Inox and PVR.

Independent multi-screen, privately owned theaters are likely to be self-owned(including building) by the owner group and must have contained the damage during covid early on.
Theaters are going to co-exist with OTT. The side-effect of OTT would be a slight/marginal reduction in piracy.

But people are never not going to go to theaters. A movie like Interstellar, Tenet, Endgame, Fast and Furious 7, Kaithi, etc., deserve a theater watch.
So, theaters are here to stay. Just that, I feel that independent and privately owned theaters have a far better chance of survival than the publicly listed franchisee type theater groups. Interesting times ahead to be witnessed.
Read 5 tweets
26 Oct
Most people who quit their job essentially as an act of showing middle finger to their bosses, and start a business don't realize that they are focusing on short term pain and ignoring the long term pain that running a business is.
Starting and running a business, especially as a middle-class first generation entrepreneur is not easy. If you do it only because you hate your current boss, a couple years down, the entrepreneurship world would eventually teach you working for your former boss was way better.
Pride, vanity, and moments of impulsiveness, focusing on stopping the short term pain - all these block your long term visibility, and gives you tunnel vision. This makes it very difficult for you to assess if your decision is one that's coming from a place of emotion.
Read 4 tweets
25 Oct
Last i checked, this strategy had the comments in the screenshot. Currently, I can only see the comment from the Tradetron founder.

Did the comments get deleted? Or did the original commenter delete the comments? Not sure.

But anything with respect to Tradetron, be cautious.
While I am all excited for legitimate algo-trading platforms which will aid retail trader in execution, the rampant allowance of anyone to create a strategy and manage people's money is dangerous.
While 99% of the SEBI registered or certified people aren't really any good, that's at least a good place to start to weed out the scammers and those without a skin in the game.
Read 6 tweets
25 Oct
This is why I use Indian fintwit only for entertainment.

Some nuthead retweeted a tweet from the thread out of context, and entire Indian fintwit goes crazy.

If only people read the entire thread without pulling one or two tweets out of context, but no.
Before reading anything, read what's in this screenshot. Further details here -> www1.nseindia.com/products/conte…
So, when a dividend is announced, the stock price is adjusted to reflect that, and futures price is also adjusted, and options are revised too.

But the price drop I talked about in my thread, was the drop from investors selling the stock after they have qualified for dividend.
Read 7 tweets
25 Oct
On leverage:

Whatever systems I trade (I have a couple systems I trade manually now), I trade without using leverage on top of leverage.

I primarily trade 2xATM or synthetic futures directionally, predominantly to avoid futures related slippages and reduce costs.
Banknifty futures spread is around 4 points, and slippage is usually 3-5 points one way. That is like 17-20 points two way. Add to this the commissions and all, worst case you end up looking at 20-22 points as your cost.
Nifty Futures is slightly better with respect to spread and slippage, but neither banknifty futures nor nifty futures have enough depth to scale up with, at least on intraday timeframes.
Read 17 tweets
25 Oct
A week back, the team from TIKR.com reached out and asked me to do a beta testing of their product for feedback.

While the platform is at its nascent stage and has a long way to go, it is very promising and better than SCREENER.IN in few aspects.
This is the platform dashboard page where you have the market news and updates as and when they arrive. I think they are pulling this from Reuters, not sure though.
You have a search bar on top in the platform, where you can search for stocks and get the requisite details. The best part is, the platform has both Indian and US equities. They have data from many exchanges across the globe.
Read 6 tweets
24 Oct
So, there has been some conversation regarding backtesting based on what I had posted few weeks back. I'll use this thread to tell you how I backtest ideas.

1. Depending on which instrument the idea is being tested for, I take the 1 lot quantity of that instrument.
2. I test for the entire in-sample period with just one lot quantity (75 if nifty, 25 if banknifty, and respective stock future unit sizes for stocks).

3. No additional lots will be added as the profits are generated.
For most, I keep 3 lakhs as starting capital with around 1.5 lakhs as the margin amount.

What this gives me is for one lot trading.

I look for the following:

1. Maximum Drawdown
2. CAGR
3. Risk vs Reward ratio
4. Average points per trade
Read 28 tweets
24 Oct
Grab a peanut butter sandwich. I'm gonna teach you the Dividend Arbitrage strategy in @10kdiver's style ;-)

Arbitrage = Free Lunch in market. Free lunches usually don't exist, but they do exist, if you know where to look.
What amateur traders/investors think:

"Oh, this company has announced dividend. Let me buy the stock so that I can receive the dividend. I'll sell the stock just after the requisite date until which I should hold the stock. I'll then pocket the dividend. Free money yay!"
What happens:

The stock price rises leading up to the ex-dividend date, and then falls. You get the dividend, but the stock you hold falls in price equivalently. So, you're left with no profit, and if you're lucky, no loss either.
Read 29 tweets
23 Oct
People who believe Warren Buffett to be a buy and hold investor are not very well informed.

First and foremost, Warren Buffett is a master deal-maker. And he's an expert at using derivatives to protect himself.

If he were only a buy and hold investor, he'd not be this rich.
More often than not, he's used a combination of derivatives, complex instruments in order to create a what's called "heads I win, tails I don't lose much" scenario, like the deal he did with Goldman Sachs during the housing crash.
This superb mastery of the use of right derivative instruments with the most opportune timing backed by his cash holdings has created wealth for him beyond what a simple buy and hold would have.
Read 4 tweets
22 Oct
The three biggest lies in trading.

1. A lot of content on trading that you find on Youtube is utterly and absolutely worthless. More like 99%.

Google's job is to give you the best results - based on likes, comments, interactions, etc.
The people who do the search decide what gets ranked where. New traders searching for terms makes Youtube figure out what terms are searched more.

The Youtubers figure out what terms are searched more and create content based on those terms.
Most of the creators aren't creating content that's super valuable that you should watch, because that content will not be ranked by Google. Coz, Google only ranks the content that people are looking for.

The problem is that people don't know what to look for.
Read 32 tweets
22 Oct
For those who are scamming retail investors, this should be a proper warning sign. There was one Rahul Arora on Quora who was doing something similar, and now we all know how unregulated one of the popular "algo trading platforms" is and how many people are complaining.
Before you associate with someone who promises high returns, or ease of making money - understand that there's no easy money. Easy money comes easy and goes easy. It won't stay. Don't associate with someone who promises such a thing.
Unregulated algo trading platforms are cropping up like mushrooms, and one such platform has a lot of user complaints on their comments section itself. Those running strategies there aren't registered with SEBI, let alone have at least 5 years of market experience.
Read 20 tweets
20 Oct
Back between 2014-16, @Sanjay__Bakshi hailed Kitex Garments as the next multi bagger, put a good sum of money into Kitex at 431 odd rupees. Around that time, my favorite @amitmantri did his forensic analysis and pointed out the funny math in the financials of Kitex.
Kitex has only gone down ever since Prof Sanjay had invested. Sabu was supposed to be an "intelligent fanatic" and even Ian Cassel reflected that in one of his tweets saying Sabu was a brilliant guy.
There was a very good presentation by Prof Sanjay on Intelligent Fanatics in India. The problem with such Intelligent Fanatics is that it's only visible in hindsight.
Read 9 tweets
17 Oct
Almost all the decisions in life that I regret were taken under strong emotional influence.

Looking back, this is the one thing that stands out. Whether it's greed, anger, hatred, vengeance, or just exuberance, every regretful decision has been made with emotions.
We only think that it's an emotional decision if we are overtly angry or overtly happy. But that need not be the case. Hope is an emotion. Greed is an emotion. Fear, even slightly is an emotion. When you're standing on a fence, a small emotion can nudge you to either side.
So, when making decisions that usually require a lot of changes in your life, think it through and see if any hope, desire, greed, fear, etc., have crept into the decision making process.
Read 18 tweets
17 Oct
You start a business (hypothetically).

In a couple of years, while the business is still at its nascent stages, you want to bring someone to be the CEO (essentially a late co-founder). That person has the following demands.
1. 40% stake in the business, immediately vested.
2. 5% of all net profits (on a monthly net profit basis) paid out as salary.
3. No cap on (2).
This person hasn't proven themselves yet to be a great capital allocator or a CEO, hasn't executed and brought in profits. But they are asking all this to do that. What do you do?
Read 5 tweets
16 Oct
Cars beyond 15L are immense waste of money, especially if you're buying one with a loan.

1. Need a hatch? Go for Tiago/Altroz for safety or the tinsheet Swift/Baleno for peppy drive or Honda Jazz for a combo of both.
2. Need a compact sedan? Go for Tigor for safety, Swift Dzire for peppy drive, Amaze for a balance of both.

3. Need a proper sedan? Go for Honda City, Toyota Yaris, Maruti Ciaz, Hyundai Verna, Skoda Rapid.

4. Need a crossover/mini-SUV? Go for S-Cross, Nexon, Brezza, Venue.
5. Need a proper SUV? Kia Seltos, Hyundai Creta, Tata Harrier, Tata Hexa, XUV500.

6. Need a people carrier/beater? Ertiga, XL6, Marazzo, etc.
Read 5 tweets
15 Oct
Different kind of systems you can build for trading & investing - a broad categorization:

1. Market Neutral:

Ex: Finding overvalued and undervalued securities, shorting the overvalued ones, and buying the undervalued ones. The idea is to create a portfolio of zero beta.
This way, you operate independent of market risk, and profit from the movement of individual securities.

2. Fundamental Growth:

Fundamentally identifying companies that are expected to grow and appreciate capital. You go long with these securities.
3. Fundamental Value:

Using fundamental analysis to go long in undervalued (and sometimes even deep value distressed securities).

4. Quantitative directional:

Using quantitative analysis to identify overvalued/undervalued companies, going long on latter, short on former.
Read 10 tweets